Nutrition Assistance for Puerto Rico popularly known in Puerto Rico as Cupones () is a federal assistance nutritional program provided by the United States Department of Agriculture (USDA) solely to Puerto Rico. In 2021, over $2 billion USD was appropriated as a block grant for NAP to assist over 1 million impoverished residents of Puerto Rico.OMB NAP assessment detail , Question 1.2.OMB NAP assessment detail Statistics Table Introduction. It is based on, though not part of, the USDA's national Supplemental Nutrition Assistance Program (SNAP) which in 2018 provided $64 billion in nutritional assistance to 42 million people in the 50 U.S. states, D.C., Guam and the US Virgin Islands.OMB NAP assessment detail Questions 1.3, 2.6, and 4.4.
Since its inception in 1982, the program has been providing low-income families, living in Puerto Rico, with cash for food purchases. It is a collaborative effort between the USDA and the island's government, where the former provides annual federal appropriations for the Puerto Rican government to distribute individually among eligible participants. Although the methods of providing such benefits have changed over the years, the program's basic objective of helping low-income families meet their nutritional needs has remained constant.
It has received criticism especially when federal reviews and assessments revealed deficiencies in its operations and management, requiring the implementation of various changes, including increased scrutiny. It has also attracted both criticism and advocacy from Puerto Rico and the United States over its effectiveness in helping poor families, and its impact on Puerto Rico's social classes and economy.
History Food stamps have been issued in the United States since World War II, but the program did not include Puerto Rico until the early 1970s, when U.S. Public Laws 91-671 of January 11, 1971 and 93-86 of November 1, 1974 partially extended the Food Stamp Program to U.S. territories. The Food Stamp program was later expanded to provide full coverage and benefits to Puerto Rico and other territories under Section 19 of the Food Stamp Act of 1977.OMB NAP assessment detail Section 1, Question 1.1.
By 1977, the Food Stamp Program in Puerto Rico was larger, in terms of both the percentage of the population participating and expenditures, than any of the programs operating in the 50 U.S. States, with 56% of the Puerto Rican population participating in the program.GAO 1978, Report No. CED-78-84.FANRR-19-3, Chapter 11, p. 286, par. 3. In total, it accounted for approximately 8 percent of the national program's beneficiaries, and its operations and benefits awarded accounted for 8 percent of the national program's total federal expenditures.
To address these issues, the 1981 Omnibus Budget Reconciliation Act (OBRA) eliminated Puerto Rico from the national Food Stamp program and created the Nutrition Assistance Program (NAP) for Puerto Rico as a block grant to provide more administrative flexibility to the Commonwealth while reducing Federal expenditures.FANRR-19-3, Chapter 11, p. 286, par. 4.OMB NAP assessment detail Section 3, Question 3.1.OMB A-133 Comp. Suppl., p. 4-10.566-2, par. 5. After a year of studies and design, it commenced operations on July 1, 1982 with an annual appropriation of $825 million.OMB NAP assessment detail Section 2, Question 2.6.FNS Newsroom: Fact Sheets . The new block grant program differed significantly from the former Food Stamp program in three major ways.GAO 1992, Report No. GAO/RCED-92-114. First, the new NAP program was designed to distribute the benefits through physical checks, ensuring that the benefit would be payable only to the beneficiary while at the same time reducing administrative costs, since the former physical vouchers (cupones in Spanish) were subject to storage and accountability problems, theft, counterfeiting and even trafficking.FANRR-19-3, Chapter 11, p. 286, par. 6.OMB NAP assessment detail , Section 1, Question 1.4. Second, the benefits were no longer restricted to vouchers redeemable only for food, but were provided in cash. The beneficiary could then elect to purchase a product or select services other than food.FANRR-19-3, Chapter 11, p. 286, par. 7. Third, the overall assistance provided to Puerto Rico was limited to an annual block appropriation, requiring the Puerto Rican government to adjust its program management to allocate the funds.FANRR-19-3, Chapter 11, p. 286, par. 8. Between 1982 and 1986, the U.S. Congress awarded $825 million annually in block grants for the NAP program, and since then the appropriations have steadily increased by an estimated 3% to 4% to compensate for inflation.FANRR-19-3, Chapter 11, p. 286, par. 9. In 1989, the $852.7 million NAP payments to island residents made up almost 20% of all US federal money transfers to Puerto Rico that year. It has surpassed $1 billion annually since the early 1990s, and increased 30% from 1993 to 2002. Since fiscal year 2006, the appropriation has reached over $1.5 billion annually. NAP appropriations were $1.9 billion in Fiscal Year 2020, and more than $2 billion in Fiscal Year 2021.
Participation rate Over the years there had been a gradual decline in participation in NAP. While the participation rate in the previous Food Stamp program was estimated at 56% (more than 1.5 million island residents),OMB NAP assessment detail , Question 4.4. by 1994, participation in the NAP program had decreased to 1.3 million residents,FANRR-19-3, Chapter 11, p. 287, par. 1. and by 2006 it had decreased to just over 1 million. In contrast, the Puerto Rican population had steadily increased throughout those same periods.Puerto Rico . The World Factbook. Central Intelligence Agency.
However, the participation rate increased to 1.3 million in 2018, which was 40% of Puerto Rico's population. Perhaps as a consequence of Hurricane Maria in 2017 and the prolonged recession in Puerto Rico (which began in 2006), NAP had become fundamental in addressing poverty in Puerto Rico.
In 2018, more than 800,000 seniors living in Puerto Rico and over half of Puerto Rico's children, were receiving nutritional assistance through NAP.
Criticism Since its creation, the program received much criticism both within and outside Puerto Rico. Critics argue that, since the program provides non-taxable income without any employment requirements, recipients receive free money without incentives for work, which hinders the economic output and development of the island,Trouble on Welfare Island, The Economist, May 25, 2006.Report No. GAO-06-541, Chapter 3, p. 70, par. 3. especially when Puerto Rico's employment participation and unemployment rates have been consistently inferior to U.S. national levels,Report No. GAO-06-541, Chapter 3, p. 69, Figure 22. while the average aid provided in Puerto Rico has exceeded the U.S. national average ($94 versus $74.79, respectively; 2001 estimate). People from the Dominican Republic do many of the jobs in Puerto Rico that pay too little to attract the locals. However, proponents of the program argue that Puerto Rico's social condition is in far worse shape than any of the 50 U.S. states.Report No. GAO-06-541, Chapter 3, p. 48, par. 1–3. Approximately half of the island's population lives below the U.S. Federal poverty guidelines,2000 U.S. Census.Welcome to Puerto Rico: Economy . and many have difficulties in meeting their nutritional needs due to increasing inflation and economic stagnation in the island. Furthermore, the relation between the NAP benefits and the low employment participation and high unemployment rates has not been studied, and there is no consensus on their actual causes.Report No. GAO-06-541, Chapter 3, p. 70, par. 1.
After Hurricanes Irma and Maria in 2017, NAP received some extra funding. In 2021, the Puerto Rico representative in the United States House of Representatives, Resident Commissioner Jenniffer González, and others, stated people in Puerto Rico would be better off if Puerto Rico were participating in SNAP, an entitlement program, versus NAP, a block grant program. González sought to have Puerto Rico participate in SNAP (what the U.S. states, D.C., Guam and the US Virgin Islands have for nutritional assistance) rather than NAP, with its cap and more stringent eligibility requirements.
Program administration The Food and Nutrition Service (FNS), a component of the USDA, provides the funds to the Government of Puerto Rico's Department of Family Affairs to operate the program through an annual block grant, which covers the full cost of the benefits to participants, as well as fifty percent (50%) of the costs required to administer the program (the remaining 50% must be provided by the government of Puerto Rico).OMB A-133 Comp. Suppl., p. 4-10.566-1, par. 2.Code of Federal Regulations, Title 7, section 285.2(a). Although federal regulations require Puerto Rico to pay the benefits during the year for which the annual block grant was awarded, since 2002 the federal government has allowed Puerto Rico to use 2% of an annual surplus for benefits in future years.OMB A-133 Comp. Suppl., p. 4-10.566-4, Sec. H: Per. of Avail., par. 2.
As a condition of receiving the grant, the P.R. Department of the Family must submit an annual plan of operation to the FNS, which describes how it will distribute the funds assigned as nutrition assistance to qualifying persons. This includes identifying the island population which is eligible for the NAP benefits (i.e., family income limits, family status limits, etc.), establishing the process in which individual participants are selected, and the process of determining the benefit amount for each participant.OMB A-133 Comp. Suppl., p. 4-10.566-1, par. 3. The plan of operation is reviewed and approved by the FNS before funds are disbursed.
The Puerto Rico Department of the Family currently provides the benefits to each participating family through a debit card, which replaced the physical checks in the early 2000s. The monthly benefit is deposited through an electronic benefit transfer (EBT) system into a government-designated personal bank account, which can be accessed at any time with the debit card to withdraw cash or to make food purchases from authorized retailers.OMB A-133 Comp. Suppl., p. 4-10.566-1, par. 4–5. Since September 2001, 75% of each family's monthly benefit had been designated exclusively for making direct food and grocery purchases, while the remaining 25% could have been withdrawn as a cash benefit.OMB NAP assessment detail , Questions 3.2, 3.4 and 3.7. The ability to withdraw a percentage of benefits in cash was phased out over a few years and currently benefits are available only by using EBT card at approved merchants for direct food and grocery purchases. The EBT debit card system has improved the program's payment accuracy rate to 96.4% in 2003, 4 years ahead of its 2007 goal of 95% accuracy.OMB NAP assessment detail , Questions 4.3.
The FNS also requires the government of Puerto Rico to submit financial and performance reports on a regular basis, including quarterly Federal Cash Transactions Reports, quarterly and annual Financial Status Reports, and monthly Program Participation and Benefits Reports.OMB A-133 Comp. Suppl., p. 4-10.566-4, Sec. L: Reporting.OMB NAP assessment detail , Sec. 3, Question 3.BF2. These reports provide details on the program's obligations and actual expenditures, and help the FNS monitor the use of program funds and reconcile the program's budget with actual expenditures.OMB NAP assessment detail , Question 3.BF1.
Management assessment